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Glaxo unveils new strategy; slows buyback programme
Mon, 01 Dec, 2008
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Glaxo unveils new strategy; slows buyback programme
Wed, 23 Jul 2008, 12:01:00
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Drugs giant
GlaxoSmithkline
outlined three new strategic priorities today, as it seeks to grow a diversified global business, deliver more products of value and simplify its operating model.
"These new strategic priorities will evolve GSK into a company that has a balanced group of healthcare businesses and a lower overall risk profile," chief executive officer Andrew Witty said at a presentation to investors. "They also point to a more disciplined allocation of capital across all our different business areas," Witty added.
GSK will chase faster growth with new investments in fast growing areas such as vaccines and consumer healthcare, as well as new growth areas such as biopharmaceuticals.
"With increasing global trends to preventative healthcare and self medication, GSK can be a global leader in meeting the converging needs of customers," Witty claimed.
Witty outlined plans to accelerate growth in emerging markets and confirmed that the group intends to get shot of non-core product assets to focus on products that deliver strong sales growth.
The company is setting up a global Corporate Venture Fund that will invest in start-up companies that are working on GSK-generated assets and intellectual property, as well as early-stage companies that are using advanced technology outside of GSK to develop innovative healthcare products.
The group has embarked upon a series of activities to boost the efficiency of its operations. A project has also started within the company to generate substantial working capital savings, in conjunction with GSK's restructuring programme,
In order to give it the flexibility required to carry out its plans GSK will "vary the pace of our remaining £6.5bn share repurchases" and this is likely to result in the buy-back programme extending beyond the envisaged end date of July 2009.
The group also announced its second quarter results which saw pre-tax profits come in a little below market expectations at £1.84bn, down from £1.9bn in the second quarter of 2007. Analysts had been looking for pre-tax profits of around £1.87bn to £1.9bn.
Turnover rose to £4.9bn from £4.8bn.
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